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Regulation of a Complementary Imputed Good in a Competitive Environment

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  • Leopold Soegner

    () (Department of Economics, Vienna University of Economics & B.A.)

Abstract

This article investigates the problem of a regulated imputed good which is used in the production process of the final goods. The relationship between the firm producing the essential input factor and the regulating authority is described by a standard principal-agent setup. By assuming a fixed functional relationship in the production process between the imputed good and the final market goods, there exists some kind of separation between regulation and competition on the final good market. Thus, the degree of competitiveness on the final good market has no effect on optimal contracts. Moreover, in this model vertical integration weakly dominates vertical disintegration in welfare for subadditive cost functions.

Suggested Citation

  • Leopold Soegner, 1998. "Regulation of a Complementary Imputed Good in a Competitive Environment," Department of Economics Working Papers wuwp056, Vienna University of Economics and Business, Department of Economics.
  • Handle: RePEc:wiw:wiwwuw:wuwp056
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    References listed on IDEAS

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    6. Owen R. Phillips & Charles F. Mason, 1996. "Market Regulation and Multimarket Rivalry," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 596-617, Autumn.
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    8. David E.M. Sappington & David S. Sibley, 1992. "Strategic Nonlinear Pricing under Price-Cap Regulation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 1-19, Spring.
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    Cited by:

    1. Gerlinde Fellner & Matthias Sutter, 2009. "Causes, Consequences, and Cures of Myopic Loss Aversion - An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 119(537), pages 900-916, April.
    2. Theresa Grafeneder-Weissteiner & Klaus Prettner, 2009. "Agglomeration and population ageing in a two region model of exogenous growth," VID Working Papers 0901, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
    3. Engelbert Stockhammer & Paul Ramskogler, 2009. "Post-Keynesian economics How to move forward," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 6(2), pages 227-246.
    4. Theresa Grafeneder-Weissteiner, 2010. "Demographic change, growth and agglomeration," Department of Economics Working Papers wuwp132, Vienna University of Economics and Business, Department of Economics.
    5. Pasquale Commendatore & Ingrid Kubin & Carmelo Petraglia, 2009. "Footloose Capital and Productive Public Services," Chapters,in: Geography, Structural Change and Economic Development, chapter 1 Edward Elgar Publishing.
    6. Aleksandra Riedl & Silvia Rocha-Akis, 2007. "Testing the tax competition theory: How elastic are national tax bases in western Europe?," Department of Economics Working Papers wuwp112, Vienna University of Economics and Business, Department of Economics.
    7. Steidl, Annemarie & Stockhammer, Engelbert, 2007. "Coming and leaving. Internal mobility in late Imperial Austria," Department of Economics Working Paper Series 768, WU Vienna University of Economics and Business.
    8. Özlem Onaran, 2007. "International financial markets and fragility in the Eastern Europe: "can it happen" here?," Department of Economics Working Papers wuwp108, Vienna University of Economics and Business, Department of Economics.
    9. Engelbert Stockhammer & Paul Ramskogler, 2007. "Uncertainty and exploitation in history," Department of Economics Working Papers wuwp104, Vienna University of Economics and Business, Department of Economics.

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